Rent out or sell a condominium? Decision in times of crisis?

That is really pleasing! Everything is great with us too… I was so worried :rolleyes:

Yes. Renting out property is largely a trouble-free and secure investment. One should not be discouraged by the few horror stories. Those who shouted for stocks now can take a look at this year's stock market returns (at least -15% return). Where else can you achieve that in such a short time? Better to invest in concrete gold and “only” a 4% secure return.

Which rental apartment generates a 4% return on market value after interest and reserves? Rents would have to increase significantly for that.

Stocks and real estate are simply apples and oranges. Stocks have a low entry threshold, low transaction costs, and are very easy and cheap to diversify through index funds. Real estate (in the sense of direct investments, not funds), on the other hand, can easily be leveraged but also requires a certain leverage for the equity return to be reasonable. Diversification is difficult; correspondingly, a total loss is devastating. Transaction costs are high, but there are various tax advantages, starting with depreciation and extending to tax-free sale after 10 years. You can achieve a lot with personal effort, but on the other hand, you have the tenant hanging over you if the faucet drips or a corner in the bedroom molds.
Viewed soberly, real estate lives primarily from leverage and tax advantages, stocks from diversification and the possibility to start cheaply and without much equity.

Until 2020, in the suburban belt of a major city, it was possible without problems to purchase a property for €350,000 that could be rented out for €1,200 per month. And the ETFs you mentioned also lost -13% last year. Some individual stocks even lost as much as -60,70%. That does not happen to you with a property.

At the moment, at least in the Cologne area, it is around 30 times the JRM, and then it becomes uninteresting as a landlord. I wouldn't necessarily rely on the increase in value, especially since an apartment also gets "worn out."

The nice thing about real estate is that you only get the price quoted if you make an effort. In the meantime, you can convince yourself that the property is not losing value. The rude awakening can come, however, when you list it on immoscout and have to lower the price by 10% after 3 months. ;)

The values for 2022 were of course rather moderate, but in the medium and long term the outlook is actually quite good. The development is simply much more volatile when the price is determined multiple times per second based on real transactions and not just every umpteen years via an appraisal. In the long term, however, this balances out.


PS: I don’t know where you still found something about 24 annual cold rents in 2020. The rule was rather well beyond 30 annual rents, many regions even at 40